AngloGold Ashanti Limited (AGA.gh) HY2022 Interim Report
Johannesburg, 5 August 2022 – AngloGold Ashanti Limited (“AngloGold Ashanti”, “AGA” or the “Company”) reported a solid performance for the first half of 2022, with production 3% higher year-on-year, an increase in total cash costs limited to 6%, and a strong improvement in cash flow. The Company declared an interim dividend of 29 US cents per share, or $121m, and remains on track to achieve full-year guidance.
Production for the first six months of 2022 was 1.233Moz, with second-quarter output up 10% versus the first quarter of 2022. Production growth was underpinned by higher grades and tonnes processed, leading to marked improvements from the Australian and Latin American operations, which offset lower production from Kibali and Geita. Obuasi continued its ramp-up through the period and is on track to achieve its annual production guidance of 240,000oz to 260,000oz for 2022.
Total cash costs for the first six months of 2022 were $1,068/oz, up 6% from the first half of 2021 driven largely by accelerating inflation across several input categories as well as larger royalty payments due to the higher gold price received. These cost pressures were partially offset by operating improvements and a 10% increase in underground grades.
“The fundamentals of our Company continue to improve, despite the challenging cost environment,” said Chief Executive Officer Alberto Calderon.
“We have the right structure and the right people in place to further optimise from our portfolio and close the gap with our peers.”
Adjusted EBITDA for the first half of 2022 was $864m, compared with $876m for the first half of 2021. Headline earnings for the first half of 2022 were $300m, or 71 US cents per share, compared with $363m, or 87 US cents per share, in the first half of 2021.
Free cash flow increased to $471m for the first half of 2022 from an outflow of $25m in the same period last year and the balance sheet remains flexible during an ongoing period of reinvestment in improving its portfolio. The increase in free cash flow was supported by $549m received from the Kibali gold mine in the Democratic Republic of the Congo.
The $365m cash acquisition of Corvus Gold Inc. (“Corvus”) was completed in January 2022, creating a strong foothold in the prospective Beatty district in Southern Nevada which the Company plans to bring into production in about three years. The district is expected to grow over several years to more than 300,000oz per year production after mining commences and be active for two decades or more, with all-in costs well below AngloGold Ashanti’s current average.
The balance sheet remained in a solid position after funding the Corvus acquisition and paying the 2021 year-end dividend, with approximately $2.6bn in liquidity, including cash of $1.3bn at the end of June 2022. The $1.4bn multi-currency revolving credit facility was refinanced during the second quarter of 2022, extending the maturity to 2027.
The Company continues to progress its Full Asset Potential (“FAP”) review programme, with the initial assessment stage of the process completed at the Sunrise Dam mine in Australia and the Siguiri mine in Guinea. Both sites are now progressing to the implementation phase, during which the optimisation opportunities that have been identified will be implemented. The Cuiabá mine in Brazil is currently in the process of completing its FAP assessment. Tropicana, Geita and Serra Grande are the next sites expected to undergo the assessment process in the second half of 2022. The FAP review programme is aimed at achieving a step-change improvement in operating performance and competitiveness.
FIRST HALF YEAR 2022 HIGHLIGHTS
- Strong safety result: Total Recordable Injury Frequency Rate improved 39% as compared to H1 2021 to 1.33 injuries per million hours worked
- Free cash flow of $471m; underpinned by cash distributions received from Kibali
- Interim dividend of ZAR493 cents per share (equivalent 29 US cents per share) declared (2021: ZAR87 cents per share, 467% increase)
- Obuasi on track to achieve its annual guidance of 240,000oz – 260,000oz for 2022
- Operational fundamentals improving – sequential quarterly production improvements; on track to meet full-year guidance
- Full Asset Potential review programme progressing, Sunrise Dam and Siguiri in implementation phase; new sites to commence assessment process
- Reinvestment programme ongoing to grow Ore Reserve and production, at lower costs, over the medium- to longer term
- On track to meet guidance ranges for 2022 with total cash costs trending towards the top end of guidance
- First half production increased 3% year-on-year to 1.233Moz
- Strong production contributions from Cerro Vanguardia (+17%), Siguiri (+21%), Sunrise Dam (+15%), Iduapriem (+14%) and Tropicana (+14%)
- Underground grade +10% year-on-year following reinvestment initiatives
- Total cash costs increased 6% year-on-year to $1,068/oz in H1 2022
- All-in sustaining costs (“AISC”) increased 6% year-on-year to $1,418/oz in H1 2022 mainly due to planned higher sustaining capital expenditure and increased total cash costs
- Basic earnings of $298m in H1 2022, from $362m in H1 2021; Headline earnings of $300m in H1 2022, from $363m in H1 2021
- Net cash inflow from operating activities of $992m in H1 2022, from $467m in H1 2021 mainly due to higher Kibali dividend and lower taxes
- Adjusted EBITDA decreased 1% year-on-year to $864m in H1 2022; Adjusted EBITDA margin of 41%
- Adjusted net debt down 13% year-on-year to $740m at 30 June 2022
- Free cash inflow of $471m in H1 2022 versus an outflow of $25m in H1 2021
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